Why DIAs trump SPIAs for retirees

Retirees should look to deferred-income annuities over single-premium immediate annuities for more liquidity and better longevity protection at a lower cost, according to this article. It discusses the fundamentals of deferred-income annuities, as well as the pros and cons of choosing DIAs over SPIAs, such as the failure to provide full inflation protection. For a hypothetical 65-year-old couple with a spending goal for their portfolios of 4% of retirement-date assets, the writer concludes that investing in a DIA with a 10- to 20-year deferral period is more effective than using a SPIA.